If your loved one is in the nursing home or assisted living facility and is on Medicaid in Florida, you may know that he or she is allowed to own a homestead property if the property is less than $560,000 in value (2017). If the Medicaid recipient is single, then all of his or her income, minus $105/month (the personal needs allowance), must go to the facility as part of the patient's responsibility. This means that the Medicaid recipient may own the homestead property but that her or she cannot keep their income to actually pay for the home. The family will have to pay for the home if they want to keep it.
But what if there is no family member that is able or willing to pay for the home's upkeep (i.e., taxes, insurance, utilities, maintenance), or the family does not want to maintain the home? This is a very common question that we can help you address.
If you have decided to sell the home, the proceeds could take the applicant off of Medicaid, if they keep the funds. Importantly, if the home sells, Medicaid will not take the proceeds away, but the proceeds will take him or her off of Medicaid unless you act quickly. This means that with an elder law attorney's assistance, the proceeds may be able to be protected.
Once the home is sold and the proceeds come in, the Medicaid recipient must disclose the sale to Medicaid within 10 days as a change of circumstances. In order to keep Medicaid, the sales proceeds must be legally spent or protected by the end of the following month. At the sale of the home, this is when you will want to meet with an elder law attorney. There are plenty of options in protecting the sales proceeds, such as:
- Medicaid spenddown
- Personal Services Contract
- Pooled Trust
- Income Producing Property
Your options in protecting the home sale proceeds depends upon a number of issues, which should be addressed with a qualified elder law attorney before you sell your home.
Importantly, you cannot gift the homestead property away within 5 years of a Medicaid application, so planning in advance is very important if you want to provide an inheritance for your children. If you want to protect your home for your children's inheritance before you go into the nursing home or assisted living facility, you may want to download a copy of our free guide to protecting your Florida homestead property.
People who read this article may want to read the following:
- Can we protect assets with the elder already in the nursing home?
- My loved one just went to the nursing home - what will happen next?